Digital entrepreneurs in Europe are most likely to flourish in Denmark, according to an entrepreneurial index from Imperial College Business School.
The UK came in sixth place in the index which academics say reflects the fact it has hotspots for digital entrepreneurs such as the “Silicon Roundabout” but struggles to deal with the digital divide which means some parts of the country lag behind.
The European Index of Entrepreneurship Systems (EIDES) ranks the 28 EU Member States according to the level of digital and non-digital entrepreneurial infrastructure in each country. It provides insight into both general framework conditions that affect all businesses, as well as specific, or ‘systemic’ framework conditions that directly impact stand-up, start-up, and scale-up ventures.
The findings of the report will be showcased at a conference at Imperial College Business School today - Digital Transformation: Reimagining Business for the Digital Age.
The index is designed to provide a meaningful basis for cross-country comparison and provides policy scenarios to help each country work towards improving its conditions to support entrepreneurial growth.
"With Brexit looming, these results mean that the UK’s global standing as a start-up hub could now be at risk."Professor Erkko AutioChair in Technology Transfer and Entrepreneurship, Business School
Denmark scored the highest for providing the best general framework needed for setting up and running an enterprise on the following criteria: informal institutions (social and cultural norms, customs or traditions), formal institutions (written constitution, laws, policies, rights and regulations) taxation, market conditions and physical infrastructure.
The country also scored highest for providing enough resources which have an impact on entrepreneurial growth including human capital, knowledge creation and dissemination, finance, networking and support structures.
Denmark was closely followed in the rankings by Sweden, Luxembourg and Finland, which all scored highly for providing optimum conditions for digital entrepreneurs.
The next group of countries, the "followers", led with Germany, followed by the United Kingdom, Netherlands, Ireland, Belgium, Austria, Malta, Estonia and France.
Impact of Brexit on UK digital start-ups
Professor Erkko Autio, Chair in Technology Transfer and Entrepreneurship at Imperial College Business School who led the report, warned that the UK’s global standing as a start-up hub could now be at risk, especially given the current economic uncertainty surrounding Brexit.
Professor Autio said: “Although the UK has some amazing hotspots for digital entrepreneurs, notably the “Silicon Roundabout” in London, those in the regions are still struggling to make an impact with their businesses, as they lack the resources and infrastructure needed to succeed. The country will need to find a way to bridge this divide to bring more regions up to speed if UK based digital entrepreneurs are to successfully compete with those in other European countries after Brexit.”
He continued: “With Brexit looming, these results mean that the UK’s global standing as a start-up hub could now be at risk. Brexit risks eroding the position of the UK’s entrepreneurial hotspots, with other European hotspots such as Berlin and Paris actively campaigning to attract start-ups and scale-ups away from the UK. Losing access to the EU single market could also deliver a blow to the UK’s ability to provide an attractive environment for digital start-ups and scale-ups.”
The European Index of Digital Entrepreneurship Systems was commissioned by the EU Joint Research Centre and prepared in collaboration with Imperial College Business School and the University of Pécs. The full report is available to view on the EU Science Hub. The EIDES report will be updated on an annual basis.
A rankings table showing the UK’s position in the EIDES report is available on request.
The conference, Reimagining Business for the Digital Age is taking place today at 09:30 and you can watch the live stream and join in the conversation by using #IBDigitalBiz
This article was first published 28 March 2019 by Imperial College London.